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Kai Ryssdal: Lucy had mergers as buzzword number three this year. But the truth is a lot of charities have already had to get together to survive. Today, on World AIDS Day, the story of two AIDS support groups that decided to join forces.

In the bright yellow kitchen there are some cookies on the counter and what look like the fixings for lunch. The house Casa Madona is the home for women and children living with HIV-AIDS who might otherwise be homeless.

ALDRETE: When they come in sometimes their health is very, very low because either they've been in the streets, or they've come from an abusive environment and stuff like that.

Casa Madona and four others like it in L.A. County are managed by a group called The Serra Project. It's been around for about 20 years, giving people affected by HIV-AIDS a safe place to stay. But a couple of years ago, the folks at The Serra Project noticed the energy just wasn't there anymore. AIDS programs weren't getting the kind of support they used to.

At the same time, across town another organization was dealing with that same decline. That group -- Aid for AIDS -- provides direct financial assistance for people living with the disease. Maybe helping out with rent or helping to pay utilities. That similarity got Executive Director Terry Goddard thinking merger. A classic case really of vertical integration. The Serra Project gets people on their feet. Then Aid for AIDS helps get them under their own roof.

TERRY GODDARD: This happened about 2006. It happened before all the economic catastrophe that happened. We saw this as an opportunity to basically strengthen our organizations. In an era that we're seeing decreased funding. I mean the state of California just decreased it by $85 million. So this was an opportunity that we couldn't pass up, and it's one of the best things we did.

RYSSDAL: We all understand how that works in a corporate environment. You get a bunch of lawyers, and they hash things out. How does that work for community service organizations that can't really afford bunches of lawyers. And really want to spend all their resources on helping those in need.

GODDARD: Well, you still need bunches of lawyers. But what you do is you get pro-bono attorneys. And so, we were very blessed, both organizations had pro-bono attorneys that helped us through this process.

There was some resistance. Any time you cut $280,000 from a nonprofit's budget, toes are going to be stepped on. Never mind the fact that the two groups really could not have had more different beginnings.

GODDARD: Well it was interesting because Aid for AIDS came from the gay community in Silverlake area. It started in that as a response, and The Serra Project started from the Los Angeles archdiocese.

So once the culture shock was over, Goddard set about re-organizing. To clients and contributors, Aid for AIDS and The Serra Project are still two distinct companies. Underneath, though, they share back offices. Things like administrative support and development staffs and most of their donations. It wasn't easy. It took two years 'til the merger was done. But Goddard says even nonprofits, maybe especially nonprofits, absolutely have to think about the bottom line.

GODDARD: I really look at what we do as a business and that you have to look at it as a business. I mean we're in the business of caring.

Being a better business lets them take better care of their clients. Clients like Christine. Standing in a hallway at Casa Madona, she wraps one arm around manager Martha Aldrete.

CHRISTINE: When I was told I was HIV positive I couldn't believe it. I just knew that I was going to die. I was living with somebody, but then they kicked me out./p>

Now she's got a room and a place to stay. And Aldrete prodding her to get out on her own.

CHRISTINE: Before I came here I was sitting in the house and doing nothing. She's my buddy. But when I came, she told me, "No, you must go to school."

Christine's in computer classes now. Once she's done with her time with The Serra Project at Casa Madona, her case file moves over to Aid for AIDS. And the other half of the merged organization steps in. It's the same company, just a different product.